What is my company worth?

This podcast episode explores various valuation methodologies used in mergers and acquisitions, with a focus on middle market companies. The hosts discuss the importance of valuation in determining a company's worth and explain three main methodologies: comparable company valuations, discounted cash flow valuations, and the use of multiples. Comparable company valuations involve looking at what similar companies have sold for in the market to derive a logical valuation. Discounted cash flow valuations analyze a company's future cash flows, while multiples compare a company's value with similar companies in the industry. The hosts highlight the influence of factors such as growth rate, management team, and competition on valuations, and the impact of external events like Covid-19. They also touch upon the importance of a competitive process in achieving the best price and terms in a transaction. Overall, understanding these valuation methodologies is crucial for middle market mergers and acquisitions. Main points • Valuation methodologies used in mergers and acquisitions, particularly in the middle market, are important in determining a company's worth. • Comparable company valuations involve looking at what similar companies have sold for in the market to derive a logical valuation. • Discounted cash flow valuations analyze a company's future cash flows based on historical performance and discount them to calculate the net present value. • Multiples are ratios used to determine a company's value by comparing it with similar companies in the industry, such as revenue multiples and EBITDA multiples. • Factors such as growth rate, management team, and competition can influence valuations. • External events like Covid-19 can impact valuations. • Understanding these valuation methodologies is crucial for middle market mergers and acquisitions.